Finance the purchase of expensive equipment, vehicles or technology with our Asset Finance solutions. Purchase assets on affordable credit & choose to retain the ownership of the asset.
Hire Purchase – Asset Finance to Power the Purchase of Important Assets
All successful businesses have one thing in common – significant investments and reinvestments.
If you are running a business, you cannot afford to keep taking all the profits off the top of cashflow. A certain percentage always needs to be reinvested in order to grow the business and keep up with the changing landscape of your industry. A sizeable part of this investment is usually directed towards the purchase of new assets. These assets can range from the state-of-the-art technology to a much-needed fleet of vehicles. Even smaller assets like everyday electronics may cost your business hundreds, if not thousands of pounds. Not all businesses are in a position to bear these costs upfront. This is where Asset Finance comes to the rescue.
Please visit this page to compare the various types of Asset Finance.
What is Hire Purchase (Lease Purchase)
Hire Purchase is one of the most popular types of Asset Finance packages.
With Hire Purchase, businesses can spread the entire cost of the asset across lighter instalments. This allows even small businesses to purchase important but expensive assets that they may otherwise wouldn’t be able to afford.
Hire Purchase – Who Is It for?
Hire Purchase is a common Asset Finance variety that suits most UK businesses if not all. Many small and medium sized businesses rely on our Hire Purchase solutions to routinely fund their asset acquisition projects. Hire Purchase is also commonly referred to as ‘Lease Purchase’. For all practical reasons, you can treat Hire Purchase as a loan that aims exclusively to fund the purchase of a particular asset.
It is important to note that Hire Purchase allows you to claim the ownership of the asset at the successful conclusion of the repayment term. Therefore, most lenders base their Hire Purchase Asset Finance decisions on the creditworthiness of the business. We advise you to make sure that your business has a clean record of repayment and a healthy credit score in order to maximise your chance of getting multiple offers.
Benefits of Hire Purchase
Hire Purchase is a primary source of Asset Finance for a number of business – and with good reasons. Let’s take a look at some of the important advantages that Hire / Lease Purchase has to offer:
Convenient Ownership
In the present economy, it is becoming increasingly difficult for small and medium businesses to own assets. To make the matters more challenging, a significant share of the profits goes towards mortgage repayments, at least in the younger years of a business. Getting a high-street lender or a bank to extend a line of credit isn’t an option in such cases. Hire Purchase allows businesses to overcome these problems with relative ease.
A Hire Purchase contract allows the borrower to claim the ownership of the asset. This is possible only when the assumed price of the asset at the time of the term conclusion is rolled into the monthly or quarterly repayment schedule. Thus, with the help Hire Purchase, businesses can plan and purchase expensive assets without hurting the cashflow.
Easy, Flexible Repayments
Hire Purchase lets your business benefit from the power of Asset Finance with affordable repayments. Most Lenders let you choose between monthly and quarterly repayment options. These options typically depend upon the creditworthiness of your business, the type of the asset in question and its market value.
Interest Rates to Suit Your Requirements
Commercial Finance Network’s Asset Finance solutions allow you to choose from fixed rate loans as well as tracker loans. You can choose the more affordable option of these two by weighing your repayment potential against the loan term. Our team of experts is always at hand to help you make the most pragmatic decisions in this regard.
Tax Benefits
In most cases, your business will be able to claim tax deductions based on the interest rate component of your repayments. Many Lenders also pass on the writing down allowances to the borrower. All these factors, in unison, help bring the repayment amount down.
Hire Purchase – Who is Responsible for the Asset During the Loan Term?
Most businesses have this question while applying for Hire Purchase Asset Finance.
If you have chosen to retain the ownership of the asset and your repayment schedule reflects the price of the asset, you will – in most cases – be responsible for the asset. This means that the security, insurance and maintenance of the asset will be your responsibility. Also, you will have to bear the costs of depreciation of the asset, if any.
Choose from the Most Affordable Hire Purchase Asset Finance Offers
Hire / Lease Purchase, although popular, comes with its own risks. Lenders rarely get to benefit from the ownership of the asset. This greatly reduces the cover against risks of non-payment. Therefore, it’s very common for businesses to see their Hire Purchase application being turned down.
Your business, however, doesn’t have to follow this route. Working with a diverse and highly experienced range of specialist, UK-wide Lenders, we make sure that your application has the best chance of success. From handling all of the paperwork to ensuring that you get to use the asset as soon as possible, our Asset Finance team looks after every aspect of your Hire Purchase application.
Our Hire Purchase services can help you acquire the assets that can power your business ahead. Get in touch with us today to speak to one of our Asset Finance Experts!